China Goldmines slashes 2008 production outlook by 75 pct

Nov 4 (Reuters) - Miner China Goldmines Plc (CGM.L) slashed its 2008 gold production forecast by about 75 percent, citing stringent underground mining safety procedures, frequent power cut-offs and outages, sending its shares down 10 percent.

Slower-than-expected ramp-up due to delays in underground mine refurbishment, a harsh winter and lower-than-expected grades of gold ores were among the other reasons for the revised production outlook, the company said in a statement on Tuesday.

The gold resource company focused on the discovery and development of gold projects in the Hunan Province in China said it will produce 5,000 ounces to 6,000 ounces of gold for the year ending Dec. 31, down from its earlier forecast of 20,000 ounces.

The company, however, said it was confident that productivity levels would increase in the coming quarters. It set a production target of 20,000 ounces to 25,000 ounces of gold for the year ending December 2009.

The company said its cash position remains strong with $17.3 million in the bank as of Sept. 30, adding that it will review all capital and operating costs to monitor and maintain its strong cash position.

At 1047 GMT, the company's shares were down 9.6 percent at 33 pence on the London Stock Exchange. (Reporting by Ramkumar in Bangalore; Editing by Himani Sarkar)